House committee refuses to put squeeze on personnel

By TOM PHILPOTT

Published: Friday, June 7, 2013 at 08:47 AM.

The House Armed Services Committee has ignored warnings from the Joint Chiefs, the secretary of defense and, this week, from the most influential defense think tanks in
Washington
by approving a fiscal 2014 defense authorization bill that does little to nothing to trim personnel costs.

Military beneficiaries and their advocates will applaud these lawmakers who refuse to support higher Tricare health fees or even a modest pay raise cap in the face of shrinking defense budgets, remaining worried that it will rile or insult service personnel and retirees in wartime.

But among the rising chorus of critics for this everything-for-troops-always stand are some senior members of the committee who openly agree with the Joint Chiefs that the defense budget is disturbingly out of balance.

The House committee not only rejected higher Tricare fees for retirees and a .8 percent cut to January’s 1.8 percent pay raise for current forces, but it has voted to block a long-planned shift in Tricare options for 171,000 geographically-remote users of Prime, the managed care option.

Prime enrollees who reside more than 40 miles from a military treatment facility were to lose access to managed care Oct. 1 in favor of Tricare Standard, the fee-for-service insurance option. For beneficiaries who fall ill Tricare Standard fees mean higher out-of-pocket costs.

But a grandfather provision drafted by retired Marine Rep. John Kline, R-Minn., and attached to the House bill, would allow these beneficiaries to stay under Prime using one-time “opt-in” feature. The arrangement with Prime would end if and when they relocate to a different zip code.

If the Senate also accepts the provision, it would derail consolidation of Prime service areas that Tricare officials touted would save up to $56 million a year. Under Kline’s plan, projected savings would accrue very slowly over time, only as beneficiaries move or lose Prime eligibility.

The House Armed Services Committee has ignored warnings from the Joint Chiefs, the secretary of defense and, this week, from the most influential defense think tanks in Washington by approving a fiscal 2014 defense authorization bill that does little to nothing to trim personnel costs.

Military beneficiaries and their advocates will applaud these lawmakers who refuse to support higher Tricare health fees or even a modest pay raise cap in the face of shrinking defense budgets, remaining worried that it will rile or insult service personnel and retirees in wartime.

But among the rising chorus of critics for this everything-for-troops-always stand are some senior members of the committee who openly agree with the Joint Chiefs that the defense budget is disturbingly out of balance.

The House committee not only rejected higher Tricare fees for retirees and a .8 percent cut to January’s 1.8 percent pay raise for current forces, but it has voted to block a long-planned shift in Tricare options for 171,000 geographically-remote users of Prime, the managed care option.

Prime enrollees who reside more than 40 miles from a military treatment facility were to lose access to managed care Oct. 1 in favor of Tricare Standard, the fee-for-service insurance option. For beneficiaries who fall ill Tricare Standard fees mean higher out-of-pocket costs.

But a grandfather provision drafted by retired Marine Rep. John Kline, R-Minn., and attached to the House bill, would allow these beneficiaries to stay under Prime using one-time “opt-in” feature. The arrangement with Prime would end if and when they relocate to a different zip code.

If the Senate also accepts the provision, it would derail consolidation of Prime service areas that Tricare officials touted would save up to $56 million a year. Under Kline’s plan, projected savings would accrue very slowly over time, only as beneficiaries move or lose Prime eligibility.

Meanwhile, Tricare would continue to pay regional contractors to maintain networks of primary care providers and specialists for as long as even one “grandfathered” beneficiary remained. Also, Tricare would have to develop new business rules and processes to identify and manage the grandfathered beneficiaries starting Oct. 1, officials explained.

As reported here two weeks ago, the only Tricare fee hike the House committee couldn’t stop this year is a $4 pop in a $12 co-pay that retirees under 65 and their family members now pay for outpatient care under Prime.

Among the more vocal critics of the mindset to protect personnel accounts first and always are the committee’s ranking Democrat Adam Smith of Washington; Texas Republican Mac Thornberry, chairman of the intelligence, emerging threats and capabilities subcommittee, and Jim Cooper, D-Tenn., ranking member of the strategic forces subcommittee.

They expressed their worries during mark up of the defense bill after Rep. Jackie Speier, D-Calif., offered an amendment to expedite the work of a military compensation commission to be named this month. Her amendment also would have made enactment of the commission’s recommendations more likely because Congress only could accept or reject but not modify them, the same rigid rules needed for closing excess military bases.

Smith said he backed Speier’s amendment, noting that the committee for years has not supported even modest steps to control personnel costs.

Thornberry and colleagues succeeded in blocking the amendment. But he said, “There is bipartisan support for virtually everything” Smith had argued. Thornberry joined him in warning the full committee to stop any change to curb personnel costs, clean up the defense acquisition system, eliminate excess overhead and cut a bloated civilian workforce.

“If we don’t make those reforms, we are going to be in a situation, before too long where we can buy one airplane every other year,” he said.

“That is our job, to face the realities that the gentlemen from Washington was just describing,” Thornberry said. Few decisions should be left to a “take-it-or-leave-it” plan from a commission, and not something as “fundamental to this committee’s jurisdiction…as military pay and benefits.”

Rep. Joe Wilson, R-S.C., chairman of the personnel subcommittee, stayed silent through the criticism. Wilson’s partner in defending personnel accounts against even modest trims, the ranking Rep. Susan Davis, D-Calif., agreed with Thornberry’s warnings that some changes are needed.

But Davis said the armed services committee shouldn’t lead on this when military families and retirees are telling her that compensation reforms should occur only as part of a broader effort to control federal spending.

“How are we going to bring the entire country in line so we don’t put this issue on the backs of the men and women who serve our country,” Davis asked colleagues.

Cooper sounded unimpressed and he praised Speier for “facing up to these important issues. Every member of this committee (has) got to start taking responsibility. And right now, we’re not.”

He has seen only “baby steps” to control personnel costs over 10 years, Cooper said. The result is an “astonishing” and “growing consensus in (defense) think tanks — left and right and middle — that unless we face up to these issues relatively soon, we are endangering our national security.”

Speier’s approach, to take Congress out of the process of curbing compensation “is flawed,” Cooper agreed, “but it may be necessary.”

Cooper’s reference to defense analysts was not arbitrary. Two days before markup, 25 prominent think-tank personalities signed a joint letter to House and Senate defense committee leaders urging that they act to get budgets back in balance by closing excess bases, doing a hard scrub on the defense civilian workforce and reforming military compensation. If these issues aren’t addressed, the letter argues, “they will gradually consume the defense budget from within.”

Military associations counter that sounding an alarm on personnel cost growth since 2001 distorts true gains because military pay by that year had fallen far below civilian peers, and lifetime health benefits promised to older generations of retirees had all but disappeared — until Congress passed Tricare for Life and war sparked a decade-long climb in pay and benefits.